Critical Comparison: Grenke (OTCMKTS:GKSGF) vs. PRA Group (NASDAQ:PRAA)

Grenke (OTCMKTS:GKSGF) and PRA Group (NASDAQ:PRAA) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

Profitability

This table compares Grenke and PRA Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grenke	N/A	N/A	N/A
PRA Group	-19.91%	15.56%	3.18%

Valuation & Earnings

This table compares Grenke and PRA Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grenke	N/A	N/A	N/A	$4.09	4.22
PRA Group	$1.20 billion	0.61	-$305.14 million	($6.73)	-2.89

Grenke has higher earnings, but lower revenue than PRA Group. PRA Group is trading at a lower price-to-earnings ratio than Grenke, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Grenke and PRA Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grenke	0	0	1	0	3.00
PRA Group	1	2	1	1	2.40

PRA Group has a consensus price target of $26.00, suggesting a potential upside of 33.54%. Given PRA Group’s higher probable upside, analysts plainly believe PRA Group is more favorable than Grenke.

Insider & Institutional Ownership

28.5% of Grenke shares are owned by institutional investors. Comparatively, 97.2% of PRA Group shares are owned by institutional investors. 2.2% of PRA Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

PRA Group beats Grenke on 7 of the 11 factors compared between the two stocks.

About Grenke

Grenke AG, together with its subsidiaries, provides financial services to small and medium-sized (SME) enterprises in Germany, France, Italy, and internationally. It operates through three segments: Leasing, Banking, and Factoring. The company is involved in the leasing activities, such as financing to commercial lessees, rental, service, protection, and maintenance offerings, as well as sale of used equipment; and small-ticket leasing of IT products, such as PCs, notebooks, servers, monitors, software, and other peripheral equipment; leasing office communication products, that includes telecommunication and copier equipment, as well as medical technology products, small machinery and systems, and security devices; and leasing green economy objects, such as wallboxes, photovoltaic systems, and eBikes. It also provides banking products and services, such as fixed deposits to private and business customers through its website; financing services to business start-ups, as well as development loans to SMEs and self-employed professionals; and small-ticket factoring services. The company was formerly known as GrenkeLeasing AG and changed its name to Grenke AG in May 2016. Grenke AG was founded in 1978 and is headquartered in Baden-Baden, Germany.

About PRA Group

PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies. The company also acquires nonperforming loans, including Visa and MasterCard credit card accounts, private label and other credit card accounts, personal loans, automobile loans, and small business loans from banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies, and other credit originators. In addition, it provides fee-based services on class action claims recoveries. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in October 2014. PRA Group, Inc. was founded in 1996 and is headquartered in Norfolk, Virginia.